Does Texas Have a Solar Rebate?

Does Texas Have a Solar Rebate?

If you live in Texas, you might be thinking about installing solar panels on your home. Solar energy is becoming more desirable, mainly because it is clean and green. However, that is not the only reason.

Over the last years, energy costs have increased dramatically. Moreover, it is predicted that energy costs will continue to rise by 3% per year in the foreseeable future.

On that same note, people use more power with the weather getting more extreme. This is because air conditioning units eat through power really quickly. As the days get hotter, this issue is just going to get worse.

So, people are looking for alternatives to their local utility providers, and transitioning to solar power is one of the options. That said, how feasible is solar power in Texas? How much will it cost you to install solar panels in Texas?

Solar panels are not inexpensive. However, the cost has come down by 80% over the last decade. In addition, government incentives make solar installations cheaper. For example, a federal rebate offers a significant discount on all new solar installations. In addition, other incentives in Texas can help make solar panels more affordable.

Unlike many other states, Texas does not have a statewide solar rebate. So, let’s determine how much solar panels in Texas will cost.

Financial Solar Incentives Available in Texas

Many states offer various financial incentives to reduce the upfront cost of solar installations, sometimes as much as $1,000 or even $5,000 in rebates.

Unfortunately, Texas has no such programs. However, there are still some financial incentives for solar power that Texans can take advantage of.

The ITC or FSTR

The most significant financial incentive for solar energy in Texas is the ITC, also known as the federal investment tax credit or the federal solar tax credit. Since this credit is federal, it applies to all residents of the US, not just Texans.

At this time, the federal solar tax rebate sits at 26%. In other words, you only have to pay 74% of the initial cost. This considerable discount makes solar power just that much more feasible.

However, be aware that this federal solar tax rebate is set to expire in the next few years. It is now 26%, but this will only last until the end of 2022. Then, to the end of 2023, this rebate will drop to 22%.

After 2023, there is no set plan to continue this rebate. That said, more and more people are going solar. Therefore, it would make sense for the federal government to develop a new rebate plan.

Individual Texas Solar Rebate Programs

We said that Texas as a state has no statewide incentives or rebates. However, individual utility companies and municipalities often do. Let’s look at some of these companies and cities that offer solar rebates and incentives.

  • CPS Energy is one of the companies that offer solar rebates for Texans. This company provides up to $1.20 per watt on solar panels installed. So for a 5kW system, you would get a $6,000 rebate. However, the incentive drops the larger the solar system is.
  • Austin Energy is another company that offers solar rebates in Texas. You can get a $2,500 upfront rebate if you live in Austin. You will also be eligible for the Value of Solar Tariff. This will provide you 9.7 cents for every kilowatt-hour of energy produced by solar panels.
  • There are also other municipalities and utility companies that offer various incentives. These include the city of Sunset Valley and the Guadalupe Valley Electric Cooperative.

The Renewable Energy Property Tax Exemption

While Texas may not offer upfront discounts on solar panel installations, there is the renewable energy property tax exemption; anyone who installs a solar panel system will not have to pay higher property taxes.

Of course, when you install a solar panel system on your home, it will increase its value. Estimates are that a solar system can increase the property value by as much as $3 per watt.

For instance, installing a 5kW solar system will increase the property value by $15,000. This would typically result in increased property taxes. However, your property tax will not increase due to the Texas renewable energy tax exemption.

It is also estimated that solar panels can increase a home’s resale value by as much as 4%, good news for anyone planning to sell their home. In addition, homes in Texas with solar panels sell up to 20% faster than homes without. Therefore, solar panel installations are definitely beneficial in terms of property and home values.  

Net Metering in Texas

Texas does not have state-mandated net metering laws. This means that utility companies don’t have to give you money or bill credits for excess energy.

In many states, there are net metering laws in place. This means that you get money back or bill credits for every kWh of excess energy produced by solar. However, this is not the case in Texas.

With that being said, many utility companies have their own net metering plans. Here, prime examples include El Paso Electric, the City of Brenham, CPS Energy, and Green Mountain Energy.

It is hard to say how much money you will be credited for excess energy produced. However, generally, you can expect to get anywhere from 5 to 15 cents for every kWh. It’s not a lot, but it is better than nothing.

Contact your local utility company to determine if you are eligible for net metering and what the rates would be.

The Solar Rights Law

This is not an incentive per se, but it is worth noting that homeowners associations often have a lot of power. They can often dictate quite literally everything you do with your home and your property.

In some areas, this means that homeowners’ associations can actually prohibit solar panel installations. However, the solar rights law prevents HOAs from barring residents from having solar panels in Texas.

The Average Cost of Solar Panels in Texas

The average cost of solar panels is $2.70 per watt. Before the 26% federal credit, a 5kW system would cost $13,500 in Texas. After the federal rebate, this drops down to $9,990. Of course, depending on the area you live in and your utility company, you may get more rebates.

Hi there! I'm Ally, I can help you find out if solar makes sense for your home in 30 seconds!

See if your home qualifies and how much you could save with current programs available...

Hi there! I'm Ally, I can help you find out if solar makes sense for your home in 30 seconds!

See if your home qualifies and how much you could save with current programs available...